The “Local Store Premium” – How Much Is It Worth?

When I was in college, there was a local independent bookstore – the name completely escapes me now, but I could still almost walk to it blindfolded – not too terribly far from campus. It was a very popular hangout for the heavy reading crowd and the store did all they could to maximize customer loyalty, both with students and people in the broader community. They had book clubs, author signings, frequent buyer programs, and countless other little perks, plus the staff was spectacular at finding books you’ve never heard of that were just perfect for your reading taste.

That store is now out of business.

There was also an independent record store. The owner (and constant checkout clerk) was this burnt-out guy who looked like he’d pretty much seen it all. The store was constantly playing eclectic music of all kinds and had that perfect “independent record store” atmosphere. What made it special was that you could describe your rough musical tastes to the guy, he’d nod, go flip through a few giant stacks of CDs, put something in the store’s audio system, and you’d immediately hear this perfect music that you’d never heard before. Similarly, if you wanted to hear something that he didn’t have an opened copy of, he’d shrug his shoulders, cut open the copy of the CD or record, and play it for you so you could make up your mind if it was worthwhile. If you didn’t want to buy it, he didn’t seem to mind too much. He’d also have artists in his shop regularly – they’d sit in the corner and play acoustic sets and sell and sign their CDs or records.

That store is now out of business.

Another shop I frequented was a gaming and comics shop. They sponsored free events literally every night of the week, allowing people to play the games they sold for free just to enjoy themselves. They had comic artists in the shop constantly and would commission the artists to draw a few pieces, then give the pieces away in a free raffle. The staff at the store would immediately break the shrink wrap on any item you wanted to look at and were endless fonts of information if you were looking for something in particular.

That store is barely surviving.

Why did these stores, with the great customer service they offered, close up shop? To put it simply, they weren’t able to compete with the lower prices offered by big box stores or the internet. Rather than paying full price for a book, people would go to Amazon and get a 25% discount. Rather than paying full price for a CD, people would go to WalMart and get most of their music needs fulfilled for $2 or $3 cheaper. Rather than buying games or comics in the shop, people would go online and order straight from a distributor for a 20% discount.

From the perspective of the individual customer, they’re saving a few bucks and they get what they want in the short run.

In the long run, though, the businesses died not from one big problem, but from a thousand small cuts. Then, the people that got a lot of value from the customer service provided there realized – too late – that those services were gone. The book clubs went away. The free game nights vanished. The recommendations of someone with countless years of music listening experience were gone. The opportunity to actually meet artists and writers face to face went up in smoke. The staff with tons of expertise on the topics you’re interested in vanished.

Instead, we’re left with poorly trained salespeople at big box stores and internet recommendations written by clever marketers.

The real story here isn’t some sort of guilt trip that seeking the bottom dollar has killed main street. That’s not the case at all. I encourage everyone to seek the absolute best value for their dollar that they can find.

But what’s the best value for your dollar? Is it worth it to you to pay $3 more for a book once in a while so that there’s a local place that has author signings? Is it worth it to pay $11 for a CD from a wise old guy who just opened up three new CDs for you to listen to so you could find the right one and will throw in a free Phish bootleg if you ask? Is it worth it to pay MSRP for a graphic novel so that you can meet the artist the next time he’s in town doing a signing?

That’s the type of thing your extra few dollars buys you. For some people, it’s worth it. For other people, it’s not.

But for many people, those who are just seeking the absolute bottom dollar on the item, they’ve never considered whether or not that lowest possible price is actually the best value for their money.

Whenever you’re thinking of purchasing an item, step back and ask yourself what you’re actually buying. Are you just buying an item for personal enjoyment? Or are you supporting something larger that you enjoy and value participating in?

What do I do, honestly? I mix it up. I’m quite happy to pay a little more to buy items from local businesses, but I don’t exclusively shop them, either. I usually try to ask myself if the business is adding extra value to my life beyond the item – and if they’re adding extra value to the community I care about. The more emphatic the “yes,” the more likely I am to support them with my business.

This is a decision we all have to make on our own. There is no right or wrong answer. But we all get to contribute to the final result with how we spend our money.

The answer? Do what you always do. Seek the best value and keep in mind, for you, what the best value really is.

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  1. Sandy says:

    Sadly, it’s not only the mom and pop stores who have gone due to this mentality. In our area, one example is Rubbermaid. The town that Rubbermaid was founded in virtually sponsored the town’s parks, school events, the arts and culture that was a huge part of this town. Once the company was bought up by a conglomerate, and “the evil W..mart” got in the picture, the company went downhill from there. Rubbermaid is no longer in the town, and the town is no longer the same. Once the only consideration is price, then you have to understand that those extra quarters you save are, actually, someone’s job and livelihood. Not to mention a whole town’s worth sometimes. I’m not sure that those stores and family oriented companies will ever return…sigh…but we get great bargains on Amazon, right?

  2. I listen to music a lot. I found that most of my favorite bands are the independent bands that play smaller venues.

    Even though most of them offer free mp3 downloads off their sites, I will also generally support them when I go see a show by buying a CD and/or t-shirt while I’m there, which most of the time they charge a close to at-cost price, so there is no extra for premium(a discount in fact).

  3. Broke MBA says:

    So true. But I do think the pendulum has swung so far one way that it is already starting it’s return. Especially as the recession subsides and society as a whole becomes less price oriented.

    As customers have more and more poor customer service experiences, they will begin seeking alternatives from stores who offer the services that seemed to be much more commonplace years ago.

  4. Michael says:

    No, this is a decision we have to make together! Are we going to keep these stores in business or not?

  5. Gwen says:

    I think about this every time I walk into Whole Foods. Yes, I realize that I am paying a premium, but I support what that grocery store stands for and I like how they treat their employees so I continue to shop there. But like you Trent, I mix it up. Because I do not have endless piles of money to give to every business or organization I like, I have chosen to “vote with my dollar” with groceries and food and to choose a less expensive route with my other needs.

  6. Maxcactus says:

    I mostly go to Panera Bread over the local coffee shop in my neighborhood. They both have similar atmosphere, free wifi, comfortable seating, clientele and staff. The difference is that they charge $2.95 per cup of coffee versus $1.90 for unlimited coffee.

  7. Jim says:

    To pay a premium for service or extra benefits it really has to be worth the cost to the customers. If people vote with their wallets and buy at the discount stores then they are actively saying its not worth the premium.

    The little shops need to do a better job of competing and adapting if they want to stay in business. I don’t want that to sound heartless, I’d like small shops to stay in business and I don’t want them to fail. But its their job to make a profit, not my job as customer to subsidize them out of charity. They have to really demonstrate their value to me so I will pay them more.

    The local non chain movie theatre is the one place I think of that I go to specifically instead of the big chain. But the non chain theatre is actually cheaper than the big chain theatres are.

    Its very hard for small shops to compete in the area of books or music nowadays. The internet has made those products easy to get online for cheap and those items are ideally suited for being sold on the net.

  8. Susan D. says:

    It’s also possible to support small businesses like booksellers and music stores by buying their products through services like Amazon Marketplace or Alibris. I do this frequently.

  9. Borealis says:

    There is no free lunch. If you like an activity that seems free — a picnic in the park, a hike on a cool trail, borrowing books from a library, wifi in a store — then actively pay something for it.

    Some people get so enthralled that a library must be free that they don’t realize that because it brings in no revenue, it is always the first thing cut when cities have budget problems.

    If you love something, PAY FOR IT, at least a little bit of what it is worth.

  10. Thomas says:

    I hate Walmart for this very reason… lack of value. Frugal people shop for value. Cheap people shop at Walmart. There’s a long-term value in being frugal that surpasses the short-term value of being cheap.

    I agree with #3 Broke MBA. It’s swinging back in our favor and using the Walmart example, the country is taking notice that simply the lowest price is not the best for everyone in the long run. Not for customers. Not for employees. Not for local economies.

  11. mote says:

    As a small business owner, I’m a little biased but I completely agree. Here in Guelph, Ontario, we still have a vibrant downtown marketplace, but it’s only BECAUSE of the people in this town who understand and appreciate what an independent shop can offer – classes, special events, signings, excellent customer service, quality products, and a sense of community. Shopping at Walmart will just never compare to what we can offer.

    I understand that people can’t afford to pay top dollar for everything, but as people like Trent and Ramit Sethi often say, it’s often more frugal to buy a quality item or service than to buy the cheapest thing you can find. Choose your battles.

  12. Kevin says:

    @Thomas (#10) What evidence do you have to support your thesis? (I’m no fan of Wal-Mart, by the way. I’m just curious what leads you to believe that the mood is swinging the other way. Wal-Mart’s year over year results??)

  13. Kate says:

    We have lost our independently owned bookstore and music store, too. It’s very sad and it is also a fact that authors will have a harder time breaking into the business without independent bookstores.
    I have boycotted WalMart and stores like it for years. We recently had one come into our town and a small feed and seed store is really struggling. There is no way that they can compete. But I pay more there because I do care about small businesses. Just like I pay more for shade grown coffee because I care about birds.

  14. karyn says:

    Sometimes local stores sell stuff that isn’t really much different from the box stores – and then I feel like I’m paying for the “atmosphere”. I don’t want to pay more just so I can shop in the pretend “quaint, old fashioned” place. However, we live in a small town and it’s easy to get to know some of the great things local owners are doing, like the bakery that buys local eggs from the high school ag students. Then I feel fine spending some extra money.

  15. Rachel says:

    Hi Trent,

    This post really spoke to me. I’ve worked as a bookseller at independent bookstores for the last ten years, and I’ve had my share of discussions with customers who will sniff and say “but I can get it cheaper online.”

    A friend of mine who used to own a Halifax bookstore told me that her response to that was “well, you get to decide what kind of a neighbourhood you want,” which was frequently met with a blank stare, because the person on the other end had never thought of it that way.

    It’s true, though – shop locally, and you keep money, culture, and your neighbours in your community. Shop big box, and there won’t be a local art or events to enjoy, your neighbours will have to find jobs elsewhere (and/or move) and eventually you’ll turn your ‘hood into a sterile place to live.

  16. teri says:

    don’t forget that when you choose to shop in a big box, or on Amazon, or someplace where products come to you from farther away, there is immense hidden cost. There is petroleum cost, there is environmental cost…and, just as importantly for those who will simultaneously shop for the Cheapest Thing and lament the loss of American jobs overseas: those things are now often being produced and brought to you by companies that found they could make more money by exploiting foreign workers than by paying American workers the living wage they demand. We can’t have it both ways–keep jobs at home AND shop for the cheapest product. The question is WHICH thing has more value.

  17. Jonathan says:

    People often blame big box stores for driving small independent stores out of business. They aren’t the ones driving them out of business, though, its the people who shop there driving the smaller businesses out. I shop at those stores more often than I should, so I’m just as guilty as anyone else. Its easy to blame the big stores for the empty shops on main street, but we as consumers are the ones taking money from the small business owners are giving it to large corporations. Shame on us.

  18. “Frugal people shop for value. Cheap people shop at Walmart.”

    Then I guess I’m just cheap, huh? Sue me. It’s close and convenient, and the other customers provide free entertainment.

    Around here, there really aren’t that many tiny mom&pop shops… There were quite a few where I lived in South Dakota that did fairly well. I mostly shop online anyhow for the convenience.

  19. CB says:

    I choose the small, interesting shops over the chains. It’s worth paying a little more to have them there for the good of us and the community. There’s lots of free advice, oftentimes, and products that one can’t find elsewhere. A savings of time, and a sense of contentment that one can’t have online. There’s one large large chain that has done in American small stores and American manufacturing. I went there once with a relative who was told she had to cut back for a trip. Most of the stuff was such crap that it was no bargain. I’d rather buy one good thing than any number of shoddy items that will fall apart. My savings is that I’m selective in what I need.

  20. KC says:

    I don’t shop at Wal-MArt, Target etc because its inconvenient. I have to head to the busy part of town, where there are a million cars and I have to park 50 yards away, walk another 50 yards when I get inside and look around for whatever it is I’m looking for that I can’t seem to find. I just visit smaller, local stores cause they save me time and I can get some educated assistance.

    But when it come to online shopping its pure convenience. If I know what I’m looking for, don’t need it immediately, and shipping doesn’t cost an arm and a leg I’m ordering it online and then getting back to whatever it was I was doing. Usually clothes, shoes and books are ordered online.

  21. Rosa says:

    I prefer not to drive, and I value our neighborhood having good jobs & walkable supplies and services, so I shop at the mom & pops even when they are more expensive, and sometimes even when the customer service is TERRIBLE. Sometimes, small business owners are clearly in business for themselves because they would not fit in anywhere else.

    The two places I shop where the customer service actually *is* better are the local hardware store and our food coop. There also used to be a great video store, but it went out of business a few years ago, and was replaced by a smaller one with fewer staff, a smaller selection, and lower rent to pay.

    The hardware store has changed as the demographics of the community changed (they have lots of Spanish-speaking staff now), welcomes kids (rare in basically any store – my son calls it “the hardware store where they give you popcorn”), and does all sorts of specialized services we can’t get elsewhere, like repairing old-fashioned storm windows and sharpening reel mowers. It’s also survived as, literally, 2/3 of the neighborhood hardware stores in town have closed down. It’s almost impossible for me to know if the costs are similar because half the time the things we need for our 100 year old house aren’t even carried at the big box stores.

    The coop is very responsive to customer requests, and I really adore having someone else do the research on products so I don’t have to. Some things are more expensive (meat, fruit) but some things are *way* cheaper (bulk dry goods, oil, sometimes coffee) or not even available other places (fair trade bananas, bulk laundry detergent)

    I shop at chains that open up in our neighborhood, too – we alternate between the coop and Aldi for our groceries, pretty much, because Aldi has opened two stores in the neighborhood, both within easy biking distance and on bus routes.

  22. Tyler Karaszewski says:

    haha, Panera Bread and Whole Foods as local stores. Might as well call Pepsi a “mom & pop soda company” I mean, they’re smaller than Coke, right?

    If you already know what you want, then knowledgeable salespeople don’t do you any good. You came in for a specific thing, and you’d rather pay less than more for it. The more accessible information becomes on the internet, the fewer people will be walking into stores without already knowing what they came in to buy. You’re not going to pay an extra $3 for a book recommendation if you already know exactly what book you want, are you?

    How often do you really walk into a music store thinking “I’d like to buy a new CD, but I’m not really sure which one?”

  23. steve says:

    The phenomenon you are describing is exactly why the super rich are getting a larger and larger part of the pie while the middle and lower class are losing ground and will eventually disappear. Our economic system and system of ownership encourages the concentration of wealth by rewarding efficiency and centralization of large chain stores, which puts the noncentralized independents out of business. They can now go work for Target for $8 an hour while the profits flow upwards to the owner class. On an international level, money travels from currently rich countries to the poorer countries that are willing to *work for less*.

    There is no stopping it.

  24. Chris says:

    This is a great post Trent. I shop the local hardware store a lot to help them fight back against the local Home Depot. They always provide excellent service and friendly know-how for any of my home repair questions.

  25. almost there says:

    I am currently reading and recommend the book: Cheap: The High Cost of Discount Culture by Ellen Ruppel Shell. It details how we cut our throats as a country seeking the bottom price during the past century and this one. Now our jobs are outsourced in a world economy demanding the cheapest price on goods and services.

  26. Lindsay says:

    Sad and so true. My husband and I try to frequent independent stores. We shop at a local health food store when possible, even at times drive past other super stores to get there. We go to locally owned $1 movie, juts have to wait a little longer to see the movies. Our favorite resturants are a local thai place where the owner is the waitress. I would rather pay a little extra to know my $ to going to a person not a cooporation. Most often the price is almost the same. No local bookstore though.

  27. Lisa says:

    My home value is tied to the walkable neighborhood shops. I don’t want any empty store fronts. I know every salon, grocery, camera repair shop, kid’s dance lessons, yarn, gasoline, chiropractor, gift shop, etc. within a mile of my home and wish all would give them a try before rushing to sprawlville on the edge of town. I imagine that (if it remains open) someday by kid’s first job will be at the local independent toy store.
    Thanks for the discussion, Trent. Please do more on this topic.

  28. I have a local hardware store three minutes from my house, and I have a Home Depot about the same distance. There are LOTS of times that I go to my neighborhood store, for the following reasons:

    1) I can get in and out faster.

    2) I can get my questions answered faster, and their experts are just as good.

    3) I do place some value on supporting local busiess.

    I owuldn’t say I make a habit of it, but sometimes I feel we should pay a little more, or the “little guy” will be gone forever one day

  29. Kandace says:

    I prefer shopping at farmer’s markets and local stores to support the people in my community. I can walk to a local grocery store, the library, bank, and commercial shopping area. Walking also helps me reduce the amount I buy because I have to carry it home.
    My husband and I, when we eat out, generally choose local diners or restaurants and avoid the chain fast-food places and even places like TGIFridays, Applebees, etc. The food at local diners is generally better.
    If big box stores had to rely on me to survive, well, there certainly would be far fewer of them than there are now.

  30. Sandy says:

    For those wondering why Walmart is making profits in the way they do, and putting companies, big and small, out of business, it’s this:
    Year after year, they insist on the providing company (like Rubbermaid, for example) to offer their products 5% cheaper. Think about that. If every year, you had to cut 5% out of your profit (or savings)then after a few years, there would be nowhere left to cut. So…that’s why making things in China or Bangladesh are appealing to companies..they can pay someone over there 50 cents per day, and still make Walmarts requirements, while, unfortunately, closing down factories here, where health care benefits, 401(k)s, and other perks got in the way. Peasants in poor countries don’t ask for those kinds of things.

  31. Lisa I says:

    Thank you. I’ve felt like this for years but I can say that I’m definitely in the minority. I think you might have even gone one step further with the consequences of only having big box stores–you will only ever see the “top 25″ in that category. Everything is determined by popularity.

    I make it a point to shop at a little local gardening shop in my town. I do this not because he is cheaper (he’s not) or because he has the largest selection (he doesn’t). He always has what I need though. He doesn’t have a lot of gimmicky items either but for an entirely organic gardener like me, his store is perfect. No matter what problem I have, he has a solution. And 99 times out of 100, he has an organic solution. But not only do I get fantastic knowledge and customer service from him, he has many items that I can’t find at my local big boxes because organic gardening does not meet their “top 25″ standards.

  32. Patty says:

    I’m a small business owner (SBO) and I want people to use my services. If there is a SBO in my neighborhood – I shop for goods and services with them. I know that when we keep our “own backyards” healthy, we keep our communities viberant. A viberant community makes it a destination for others to come by, keep property values attractive, and we all need that!

    There is Sophies for lunch – best stuffed cabbage ever!, the tea shop, ice cream shop that has been in business more than 50 yrs, the Green antinque guy, we lost our local hardware shop more than 10 years ago – it was a sad day. My auto mechanic – best around, my favorite printer, and a host of other great businesses!

    Shop local – keep the business in town!

  33. guinness416 says:

    As someone living in a somewhat emerging part of a big city I often find that people want the “feel” of having a walkable main street nearby but don’t patronize the businesses. It doesn’t work that way. You shouldn’t have to disavow big supermarkets and online shopping forever, but if you shop at the small stores nearby once a year don’t complain or be surprised when they can’t make the rent and are replaced by dodgy (and ugly) payday loan stores, empty shopfronts and launderettes.

    Plus using local small businesses can provide some benefits to your bottom line from time to time – our regular butcher, bartender, coffee shop owner and deli often give us discounts and freebies, although we’d continue to spend there even if they didn’t.

  34. Bill in NC says:

    40 years ago if you wanted a decent wristwatch (not a child’s toy) you had to go to a local jeweler and pay the equivalent of several hundred dollars.

    And transactions of that sort had no guarantees – you could open the watch on the counter and if it didn’t work the jeweler would simply say “you broke it taking it out of the package, no refunds”

    Chain department stores and later big box retailers took advantage of the traditionally terrible customer service offered by local stores.

  35. jc says:

    Here’s another factor, Trent, which occurs to me as you talk about what service exactly these local stores were providing: the Internet makes it easier than ever to explore musical tastes and find good recommendations than ever before. And rather than be beholden to the opinions of one or two quirky store employees, you have (potentially) the power of the hive-mind of reviewers at an Amazon.com or similar online outlet.

    I always take advantage of Amazon’s reviews, even when I don’t shop there. Similarly, local independent stores have to be able to provide these knowledge services to everyone and hope that enough inquiries translate into real sales. If the price premium is too high, they have to find another way to monetize the provision of this knowledge. The NY Times had an interesting article recently on various attempts by former record store owners in NYC to do just that.

  36. todo es bien says:

    One factor that is fairly ridiculous: Why do stores like Amazon NOT have to charge local sales tax? How are local brick and mortars supposed to compete with that, and why should they? In essence, by not compelling Amazon to charge tax, we are SUBSIDIZING the stores that are putting our local stores and jobs out of business. This at a time when almost all states are broke??? The 9% difference in price from tax alone certainly enters into my buying decisions, as well as many others. I dont like paying tax, but I really dont like destroying local businesses via an unfair situation.
    Next, someone commented on the environmental impact of not buying locally. This is a very interesting question. I watch UPS go door to door in my neighborhood, and it occurs to me is it more efficient than all those people going OUT to go shopping? It is a complicated equation when you try to map all the variables. I have a suspicion that in at least some circumstances, it is more environmentally efficient to have things delivered. Not sure though.
    Finally, one practice that I loathe is people who get their information via local services then buy over internet. If I spot a book @ local bookstore, it seems only right to buy it there. Similarly, if I ply a local source for information for buying decisions, its right to pay them for that value.
    ymmv

  37. Ken says:

    @Tyler (#22)

    “How often do you really walk into a music store thinking ‘I’d like to buy a new CD, but I’m not really sure which one?'”

    That used to be one of the *fun* things about going to a music store with friends – to browse the new music, or just to see what looks interesting. Buying new music was very much a social activity. Now, not so much. Many people forget about what life was like “before the Internet” (or, in a lot of cases, were too young to remember life without it!).

    -Ken

  38. I too hate Walmart BUT my budget is tight and I shop there for things that I know are cheaper. However I do try and support local businesses like my convenience store owner that comments if I go a long time between visits to his store. His wife calls out to me from across the store telling me that she hasn’t seen me for a long time. The owner even told me he had thought I had moved. Guilt will get me to return…..more frequently.

  39. Kim says:

    Trent: I thought you must have gone to college in my town. I was picturing the Chinook bookstore, Independent Records (which, thankfully is still in business), and the little hardware store that had everything you needed, but you went to the counter and asked, because you needed the owner to find it. It was too small and crowded to browse, but she always had everything and knew right where it was.

    I made it a point, while these places were here to do most of my shopping there whenever possible. Yes, it was more expensive, but it was also keeping my neighbors employed. My neighbors, in return, provided such personal service that it was worth it to pay a premium for it.

    For this reason, and most of my friends disagree with me on this, I REFUSE to shop Wal-Mart except in the extremely rare occasion I can’t find what I need elsewhere. I try to look at businesses and see if I agree with their business practices. At least one of WalMart’s business practices is over the line with me. My local grocery store had me as a loyal customer for over 30 years. Then they put in self-scanners, advertised it as fun and laid off 3 of MY checkers. As a business decision I understood it, but they made the colossal mistake of lying to me about it. I wrote to them and explained in some detail, how I paid slightly more for my groceries (and knew it) because of the service they provided–checking out my groceries for me; unloading the cart, scanning, hand-keying when necessary, bagging and loading my car for me. When they laid off people I knew and had visited with for years, so that I could then do their job, they lost my loyalty. And I have stuck to that. I shop at any number of different groceries now. It’s sad to me that we lost a 30 year relationship. If they had told me the truth, mentioning business realities, I would have understood. I would have been sad, but I would have understood.

    WalMart sealed their fate with me (hear them weeping?) when I found out their intrusive business practices with their suppliers and how one company (Snapper) refused to go along with it even though they lost the WalMart business. My local grocer lost my loyalty when they lied to me.

    I count it as a sad inevitable side effect of the ongoing march of time that we are losing this. But think about this. At one time you used to go to a tailor for your clothes, a cobbler for your shoes, to the smithy for your nails. Some things ARE an improvement, even if some things are lost in the process. I adjusted to the loss of our great local bookstore, to the loss of our local hardware store, and will to the inevitable loss of Independent Records which I fear is sure to come.

    My larger fear is that Kindle and other electronic readers will phase out actual books, which I LOVE. Worse, is that we have become so accustomed to imported cheap foreign products that we have lost the knowledge of how to make things ourselves, or even to know the quality of an item. Ask the average person and they cannot tell if a piece of clothing is well-constructed, a shoe well made, a cabinet put together to last. They don’t care. As long as it looks good now, that’s all they care about. I fear the loss of that kind of knowledge and ability are far more of a loss than even the -sniff- loss of my favorite bookseller. And really, that is what we are talking about. The loss of knowledge and information. We paid for that, but as a society we walked away.

    Seems a strange lament on a website about finances and frugality, but some kinds of frugality are too much.

  40. Jane says:

    One way for local businesses to survive is to provide products that the chain stores don’t. For instance, I needed a relatively rare vitamin, and no one had it locally but one small health food store. I paid a premium for it probably, but it was worth it to me to get it right away. And while I was there, I bought some other things I wasn’t planning on. That’s a problem with books, though, since people are usually willing to wait the four
    or so days that it takes to have the book shipped.

  41. Anna says:

    #39 Kim: You and Trent have really gotten to me. I’ve been buying books from Amazon, each time going just past the $25 mark to get free shipping. All this while living only 15 minutes away from a wonderful independent bookstore with a well-deserved regional (not just local) reputation. I used to shop there extensively until I discovered Amazon, then I fell back to counting my dollars and pennies and considering only the savings. I justified this practice on the basis that if I browsed at the nearby store, I would end up buying more books than I’d intended (see Trent’s many posts on this very phenomenon).

    Now it strikes me that excessive frugality of the Wal-Mart and Amazon type can be isolating, as it encourages us to consider only our personal budgets. It can allow us to ignore our community responsibilities and the fact that we live in local economic structures. But if we shop locally, we are being good citizens. The cost? Often higher. The value? Priceless.

    How about paying a little more for each purchase, but disciplining ourselves to buy a little less, thus coming out approximately even?

    I’m going back to my wonderful bookstore to browse (oh, the joys of browsing among real books instead of clicking through all those pop-ups), rely on my own taste to tell me what is worth buying, and develop my own character and power of resistance so I know exactly what to buy and when to stop. I think this will help me stay within my budget, enjoy the process, and contribute more to my community.

  42. AnnJo says:

    I’m going to offer some contrarian views here:

    Small shops today are much more focused on customer service BECAUSE of the big-box stores. They know that they can’t compete on price or variety, so the “personal touch” style of customer service is obligatory. If you were old enough to remember what small-store customer service used to be like before the big-box competition, you wouldn’t feel so nostalgic for it. Prices were high, variety was low, hours were limited, return policies were non-existent and counter service was just as likely to be rude and neglectful as warm and neighborly.

    Getting goods from producer to consumer undergoes continual change, and change can be disconcerting, but how many of us grieve for the loss of those quaint ice-truck drivers and resent our freezers for driving them out of business?

    Not speaking necessarily of Trent, but of some of the commenters: It’s mystifying how the same people who probably demand that their children’s schools offer a “global citizen”-influenced curriculum turn all xenophobic when it comes to their shopping habits.

    The local store owner whose shop couldn’t compete with the new Wal-Mart probably went to work in management there, or his kids did. Retail employees are always drawn from the local neighborhood, regardless of who owns the store, and half the retirees in your neighborhood pay their bills with dividends from Wal-mart and other corporate giants.

    Finally, doesn’t it strike any of you as a little ironic that you are idealizing local shopping while engaging in a social environment (this blog) that is just the opposite? If keeping it local is so important, shouldn’t you be out on your front porch chatting with your neighbors, instead of on this website? Just a thought.

  43. Jessica says:

    I do love the idea of supporting local businesses, but I have to agree that some of the worst customer service I’ve received is in small/boutique/mom & pop stores. I’m often surprised that these businesses aren’t more focused on customer service, because I can choose to go elsewhere, be ignored, and pay less. And you know, I find it far more frustrating to walk into a small store and see a bunch of people who ignore me vs a big store with not enough employees to help.

  44. Sometimes it’s the convenience of it all, or the future service you expect!

  45. rb says:

    I’m all for saving a buck, but if given a choice of a large chain store or a local family owned operation, I choose the later. We have a local cafe within walking distance from home that is family owned, good atmosphere and makes a great pizza. I try to go there at least weekly and teach the kids to frequent these places if you want them to continue in the community. It is a lot cheaper to go to pizza hut or dominos, but these families are just like us, trying to survive in tough economy. I’ll spend the extra money and enjoy the local crowd and community.

  46. Georgia says:

    One point an article I read pointed out – we blame the big box stores for driving small businesses out, but a very large portion of them were really driven out by family – mom & pop stores that had been in business for 15-40 years and Jr. & Ms. Jr. not wanting to continue the business because they had moved on to something else. This is especially true in small towns and in ethnic neighborhoods in big cities.

    I do buy locally a lot, but if I am near a Walmart or Lowe’s, I will shop there. My husband was better at this. He bought his medicines at a local pharmacy, instead of taking advantage of the mail pharmacy benefits of my insurance. I got 3 months supply of my meds for 2 monthly payments.

    Apparently my brother from Chicago area was right. I live in NE MO and we still have a work ethic. I shop in a minimum of 6 Walmarts and I have not met a disgruntled, unkind employee. They will walk me across the store to find what I need and so kind. I have never been in a dirty Walmart in this area. Friends have worked there for 25+ years and love it. They wouldn’t work anywhere else. So – I consider them local stores and shop accordingly. If I’m there, I buy groceries. If not, I buy a lot from our local grocer. I am retired and it is the bottom dollar for me. What little I have has to last as long as I do, and I expect that to be a long time.

  47. Treva says:

    I’ve found that I have threshold for when I stop worrying about the store the product is coming from and more about the bottom line price. For example, if I can buy it locally and the price is under, say, $50, then I buy it locally and there’s no shopping around. When the price starts going over that though, then I feel more compelled to shop around. It’s not just goods, but services, too.

    I’ve also checked out all the shops in my town — there are not many. But I know what I can purchase there, so that if a need arises, going local can be my first thought.

    Food is probably the exception. Our budget is tight so I use a price book. I’ve found that on basics (flour, sugar, chicken breasts, bananas, etc.) big box stores are generally not the cheapest; but they are cheapest in the more processed foods (boxed mac-n-cheese, cereals, etc.). However, since we just moved here, we are discovering how cheaply we can buy local produce and meat and we are making it a point to incorporate those local vendors more and more.

  48. Heidi says:

    @ #36 todo es bien: Each state that has a state sales tax also has a use tax. Here in TN, that means that if I buy something some groceries back in my home state of Michigan, where there’s no tax on unprepared food, but I haul them down here for my pantry, I have to hand over the 7.75% sales tax on the goods over to TN come tax time.
    If I bought clothes in Michigan, taxed at 6%, then I owe Tennessee 3.25% because the sales tax on clothes here is 9.25%. The same applies to online purchases.

    So much for crossing state borders to take advantage of lower sales tax on one thing or another – it’s a form of tax evasion. This is particularly clear in Tennessee, where there’s no income tax on salaries. The sales tax means a lot here.

    There’s a back-to-school tax holiday each fall on computers, clothes, etc. – and the tax holiday also means that these items bought online are also not subject to sales tax.

  49. I live in a town where the only place to buy appliances is a local store. When I bought my refrigerator I paid quite a bit more to get it locally. Something like $500 to $1000 more than I could have gotten it elsewhere.

    When we needed a freezer I looked at the local store. It was going to cost $775 for what would cost me $400 from a large store in a nearby city. Before placing my order for the cheaper freezer I called the local store and told them that I’m willing to pay a premium to shop local, but not that much of a premium. I told them I’d be happy to pay 25% more (for a total of $500) in order to buy from them. They weren’t interested.

    The sad thing is that when it comes to service, I think I get just as good if not better service from the Home Depot in a nearby town than from the local appliance or hardware store.

  50. K says:

    We haven’t addressed one service aspect of small, independent stores that can unfortunately be a deal breaker, especially in small towns – hours of operation. We live in a “need it now, buy it now” world, and small businesses often have hours that are influenced by desire to have a family life. They close at 6, 7, or 8 pm, while WM and Target are open much later. Generally I’m willing to adjust my life to support this, as living an intentional, well-planned life should keep me from those late night trips to the store anyway (most of the time!).

    However, I recently decided I won’t shop for shoes locally anymore because the store I wanted to patronize had disappointed me several times with their lack of inventory (shoes that were on display that they didn’t have fully stocked), and the final straw had to do with hours of operation. We went there at 4 pm on Sunday to buy shoes for my son (whose feet had grown so much that the tennis shoes we bought 3 weeks prior no longer fit, I kid you not). As we walked up to the door, the employee was locking it. I looked at her and she shrugged and walked away. We ended up going to Target and buying sub-par, Target brand shoes because we needed them, and now we’ll get his real tennis shoes online. Not our ideal situation – we’ll end up paying more for the two pairs than we would have for the one (even at the local store premium). What she didn’t know was that the 15 minutes it would have taken for us to find him a pair of shoes would have meant continued business from all 5 of us for life.

    I understand this from the other side – I do. My husband works for a small family-owned business, and as a result, he works more than the usual guy. They’re open from 7:30 – 5:30, but if a customer shows up at 5:30, he’ll call and come home late rather than lose a customer. Do I ever get crabby if he’s late for dinner? I plead the 5th… but I understand the reason and I know it’s the right thing to do for the long term health of the business.

  51. Trent, this post is fantastic and I hope to see more along these lines here – where the bottom line is the sum of more than just the sticker price. As a huge book lover myself I spent a lot of time in our indepedent bookstore in town. In an effort to “reinvigorate” our downtown, the City put together an appealing incentive package for chain stores and before long historic buildings were being torn down to accomodate the larger square footage and programming demands of these stores. Finally, Borders came in and drove out our independent bookstore that had been on the street for more than 20 years. Thankfully, the canny owner simply moved her business several miles away into a strip mall and still survives today. However, once the recession hit, all the chains started pulling out and now the heart of our downtown, Mill Avenue, is beginning to resemble a ghost town. Although the indie bookstore survived, it’s now about a 15 min drive from campus – whereas before, it was a five minute bike ride. The heart and soul of downtown was lost, along with much of its historic character. The chains left behind a homogenous, empty landscape and none of the small indie businesses can afford the escalated rents. It’s heart breaking. I’m hoping the City Council will see the result of their “incentives” and will try to reverse the death to downtown they’ve caused. Till then, I’m having to drive to shop at the indie book store – but will do so happily to see them survive. They cost a little more and dont have as good a selection, but their staff is tops and they are willing to order whatever I want and I dont have to pay shipping. Their special events, book signings, writer workshops, and other community-services make it a much higher value than trotting to Target or shopping at Amazon. I buy almost all my gifts from them to do my part in saying thank you for all they bring to our community. It’s well worth the extra couple of bucks per book in my opinion. I walk away feeling as a valued customer and part of the community, instead of as a line item on the corporate sales rolls.

  52. @Heidi, I don’t mean this negatively, but more power to you for actually coughing-up the sales tax money! I know it’s a huge problem for states because most folks aren’t even aware of the use tax, or what it’s supposed to be for. My mother worked the last 14 years or so for a mail-order catalog company that was local to her area, but obviously sold all over the U.S. (Tampa, FL) New York State has gotten picky and will actually get delivery records from UPS somehow to find out who isn’t paying taxes on what they get delivered from out-of-state, but most states are at a loss as to how to collect their revenues.
    Since I own a small business, I have a line-item right on my monthly form for use tax if I buy something tax-free and then use it in the office – but most folks aren’t confronted with it, and have an income tax, so it’s some horrible thing they are happy to be rid-of by shopping online.

    I think one thing that can be inferred from the overall discussion, is that this is not a cut/dry issue. I’ve been in horrible chain stores, and wonderful ones. Ditto for small/independent stores. I own a service company w/ my husband and we see it in our competition. Undercutting, pricing issues – just look at those jerks that come out of the woodwork when there’s a natural disaster. The truth is, even big corporations are run by *people*. We Humans are a funny bunch. :-) This is truly a global economy and there is no way to stop that – why would we want to when we know what’s out there? Even really, *really* back in the day, like pre-North American settlement, we had to sail on ships to get things like silk and spices! It’s always *been* a global economy. So instead of being concerned about what we keep in business, I think the overall endgame we need to be concerned about is *who* we keep in business. Big businesses can be run well with good intentions just as easily as they can be run badly with ill intentions (at least for the majority of us). Just my 2cents.

  53. Eventine says:

    I own and run a comic book store in California. We, too, are barely making it. Many of my long-time customers are buying D&D books on Amazon or taking their kids to Barnes & Noble to get anime. It’s “cheaper” and/or “more convenient.”

    We’ve had artist signings this year and will have a couple of local bands play on Halloween. All of these events are free.

    Give us little guys a chance! I’ll remember you next time you come in and can “talk shop” with you like the people at the big stores can’t.

  54. Sharon says:

    #23Steve and ‘almost there’ as well as have pointed out that there is a cost to ‘cheap’. I think it’s important to support small businesses, many provide value some do not. We produce very little here in the US and are only consumers. The folks overseas who do the work often are exploited or paid very little in order that we can live well (relatively speaking). This raises several question: what’s the true cost of those cheap products? must our life styles be such that others must suffer to provide us the cheap goods we need, often at peril to their wellbeing; Can we continue being consumers and not producers? Perhaps we need a slightly, or radically, altered economic model which starts to create value, equity and sustainability across the globe, not just the richer exploiting the poorer to provide cheap stuff.

    Tried not to ramble but there’s so much we need to think about, this post to me, leads to an need to explore these other ideas.

  55. Sue J says:

    Excellent article-I’ve always been a supporter of the smaller book stores/mom and pops, who, oftentimes, carry merchandise you might not find in the larger chain stores. Also, they’ve formed relationships with their customers/suppliers which will never go out of style. This is key to survival.

  56. John S says:

    #42 Ann-Jo’s post is one of the finest I’ve read, she is right on the money. If you missed it, go back and read it.

    I think some among us readers are confusing the quality of the *goods* with the quality of the *store* itself – and thereby missing Trent’s point as well.

    “Mom-and-pop retailers” are still retailers. Middle men. Like Wal-Mart, in most cases they add no value to the process of getting goods from the manufacturer to the consumer, other than to provide a convenient location for a store front. And they exact a surcharge for that convenience.

    Furthermore, Wal-Mart employees have much better benefits and pay than their mom-and-pop counterpart employees typically did. I would rather work for Wal-Mart than for Mom and Pop any day.

    Last but not least, let me bust the myth about the benefits of local ownership on the economy: When you buy from a mom-and-pop store, some local owner is getting rich, but when you buy from Wal-Mart, some corporate executive is getting rich. Right? Wrong. The owners get rich.

    So who owns Wal-Mart? Anyone! If you, dear reader, want to buy shares in Wal-Mart, you can. Try buying shares in a local mom-and-pop store. You can’t! Mom and Pop don’t want to give you a cut of their profits. So while only Mom and Pop benefit if their store does well, every Wal-Mart stockholder has a piece of the windfall if Wal-Mart does well. And that’s not an exclusive club; anybody can buy Wal-Mart stock, and employees are encouraged to do so.

    Acknowledging all these points, can ask yourself this: Why is a locally-owned retail middle man somehow better than a large, corporate retail middle man? How does the small, local guy provide better value?

    If you can answer that question, shop at the mom and pop. If you can’t, then in my estimation, your conscience is clean. Don’t fall for the stigma bandwagon. Mom and pop aren’t always all they’re cracked up to be.

    However, sometimes they are. Trent’s whole point in writing this was to get us to review that dynamic with fresh eyes. Thereby we can appreciate those locally owned gems that DO provide the extra measure of value and enrich our lives and our communities simply by existing. I agree that this is a personal value judgement that not a lot of us take the time to really think about. Thanks for writing this.

  57. JuliB says:

    I shop at Walmart’s less than once a year. I’m a sensitive person, and the crowds and hassles are not worth it to me to save a few bucks. I’ve also purchased a winter veggies share at an in-state farm that uses organic methods. It’s only for 2 pick-ups, but it’s expensive and this looked like a good way to try it out and decide for next year.

    I scrimp in certain areas so I can spend with ease in others.

    That said, if all goes well, the in-state farmer will become “my farmer” next year.

    Books – I use paperbackswap.com for most of my book purchases, and then support inde book publishers where possible (primarily Catholic ones). And they can be several dollars more expensive per book.

    I tried shopping at Aldi’s, but the environment and poor quality of their produce turned me off to them. Of course, if I was very short on funds, I would probably shop there. Otherwise, I stick with 2 chains.

    I look at it as a balancing act.

    Wrt/sales tax… that amount is charged by the state –in theory– to generate money to maintain the public areas where the stores are causing traffic and use. I don’t see any virtue in spending to support my incredibly overtaxed and corrupt state.

    FWIW, I do fill out the use tax form with an approx amount. Last year my accountant didn’t round properly and I rec’d a bill this year for 22 cents. Wonderful. I do it only because I prefer to be law abiding even when I don’t really agree with the law.

  58. Kate says:

    To me, supporting the mom and pop stores over the big bog chains is less about value, customer service or atmosphere, and more about self sufficiency. In keeping with the theme of personal finance, I believe that in order to be truly financially free, it is vital to have a stream of income that is not dependant on the whims and fancies of a corporate entity. This self sufficiency is beneficial for the community as well – if, in a worst case scenario, something were to happen to the supply chain, who would win out? Certainly the communities with locally based production (farmers markets, etc.) over the national chains, importing goods.
    Of course, I’d be a hypocrite if I didn’t mention that I do occasionally head to Target for the convenience, and I think the conversation about corporations sharing profits hits the nail right on the head.
    At the end of the day, it all comes down to personal preferance…what kind of community do you want to live in?

  59. james says:

    The common demoninator is community. The local stores provide(d) community. I would argue that there are lots of things dismantling local communities, especially where niche interest markets are concerned. And right this very moment, you are looking at one of the main ones, the Internet. We might be discussing this at a coffee shop or on a park bench, but here we are blogging. Just sayin….

  60. Mr. Poet says:

    I can’t think of many local businesses where I live, except for restaurants, which I prefer to patronize over chains. And in most cases, it doesn’t matter if I patronize local businesses, except to the owner. The store buys the same stuff wholesale for its shelves that the big box chains buy. It pays its workers the same low wages with few to no benefits.

    Some local businesses, too, don’t run their shops well, either. One local bookstore I wanted to go into because it may have carried books of poems I might not see at the chain bookstores? It opened one day a week for several hours. Its storefront was in a residential neighborhood, facing the trench of a lowered freeway. In other words, bad location. The last time I went, and decided not to go back, the shabbily dressed employee had locked herself out.

  61. Jenny says:

    One thing that always stuck with me was a quote from an interview with the drummer from the Roots, ?uestlove. He said that he would sometimes go into record stores and buy albums he already had, because he felt it was important to “vote with his money”.

    When you give your business to a local shop, restaurant, or business, you’re voting with your money. You’re saying that you prefer family-run, one-of-a-kind, and locally-owned. That means something, even if you think it doesn’t.

  62. Leszek Cyfer says:

    Reading your article I remembered the movie “You’ve got mail” with Meg Ryan

  63. Kathryn Fenner says:

    Well–I adore the Internet. Local record stores never stocked the arcane early music and 60s jazz I love. Local clothing stores do not carry shoes in my not-all-that-big size 11 or pants long enough for my 35″ inseam, or clothing in the double digit sizes I require–many local boutiques actually stop at size 6!! –oh, and the skirts are way too short! Halfway up my thigh has never been a good look for me.

    I could readily find fiction at the local bookstore, but nonfiction of the particular topics I am interested in–gotta go to Amazon!

    I did happily shop at the more conveniently located and recently opened Ace Hardware store, and was pleased with the service. My local clothing resale shop is a delight. The local restaurants are often excellent.

    On the other hand, I have been sold a lot of stuff I didn’t want in local shops because I have poor sales resistance and find it hard to say “no” to sales people. I actually prefer to shop for clothing and accessories unaccosted.

  64. Marle says:

    There’s an indi bookstore I sometimes wind up in, because it’s near other places I go to and my friends like it. But whenever I’m in there all I can think is “I wish I could read reviews of this book on Amazon.” I don’t usually buy books too often anyways. Usually I find a book I like using the internet (Amazon reviews or other websites) and then I go to my county library’s website and request it. We have a great county library system, and we have a system to request books from other libraries in the state, so I can get pretty much any book I’ve ever heard of. It’s really convenient, and then I don’t have to worry about what to do with the books after I read them (sell them, buy more bookshelves, whatever).

  65. Marle says:

    K @ #50
    I agree with you that hours of operation are a big deal. There’s one local store near me that sells jam and other things and looks interesting, but it closes at 5pm and I just haven’t been able to get into it after work. I don’t know why stores open early in the morning and then close early in the evening. Before 10am, there are very few people who aren’t either asleep or at work. My husband is an insurance agent, and I would love it if he stopped working at 5. But he would have no business then. He starts work at 10, and he tries to be done by 7, but many nights he works til 8 or 9 and he works Saturdays. It’s hard, but most of his customers work until 5 themselves so that’s what he’s got to do. Most small businesses, especially stores, should think about that.

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